CROSS-BORDER UNITISA TION OF PETROLEUM PRODUCTION SHARING AGREEMENTS: THE NEED FOR ADEQUATE SOCIAL STABILITY CLAUSES

Abstract

This paper argues that there is a missing ingredient in contemporary international law with regards to the protection of inter-governmental agreements concerning the joint development of straddle reservoirs of crude oil and gas. In many oil and gas producing countries, the mineral reservoirs straddle the boundaries of multiple countries especially within the maritime borders. This segment of the paper affirms that, the cross-border straddles are "...potential source[s] of international dispute[s] as to the nature and extent of rights as may be asserted by the several sovereigns under whose territory the pool lies...the potential for conflict is even stronger where the petroleum deposits straddle the common boundary of two or more countries, particularly where the shared boundary has not been delimited." The nature of the spread of the mineral necessitates international co-operations of those countries to facilitate peaceful and lucrative extraction without waste and conflict. The paper concludes that International Unitisation Treaties and Joint Development Agreements (hereinafter referred to as JDA) are prevalent legal mechanisms by which nations form partnership in the development of oil and gas reservoirs that straddle the boundaries of the countries which are parties to the Treaty or JDA.